Jakarta. Indonesia’s central bank confirmed on Tuesday that a rule taking effect on July 1 means that hotel rooms, airline tickets, property leases and most salaries must be paid in rupiah, as part of a campaign to help prop up the weakening currency.

The rule banning use of US dollars for many domestic transactions was announced in April.

On Tuesday, Bank Indonesia provided more details on the regulation aimed at controlling onshore demand for dollars, thus easing pressure on the currency.

“This is about our sovereignty,” said Lambok Siahaan, special staff to the central bank’s board of governors. “Excessive forex demand has an effect on our exchange rate and inflation.”

Earlier on Tuesday, the rupiah briefly fell as low as 13,384 against the dollar, the weakest level since August 1998. BI said the timing of the Tuesday briefing had nothing to do with recent falls in the rupiah, which has lost nearly 7 percent this year and is emerging Asia’s worst-performing currency.

Under the new rule, the central bank said, international firms will be allowed to continue paying expatriates in dollars if they were hired from abroad.

International trade and firms investing in power plants, roads and other strategic infrastructure projects will also be exempted. The central bank said it may also offer exemptions on a case-by-case basis for businesses in industries key to economic growth.

Indonesian companies must pay all of their workers in rupiah.

BI estimates around 10 percent of domestic transactions, with a total value of about $6 billion a month, are conducted in dollars.

Many businesses say they will effectively be hostage to gyrations in the volatile rupiah after the rule takes effect, and inflationary pressures could emerge as companies try to build in buffers to counter the loss of dollar certainty.

Some firms say they will still negotiate and price in dollars, then settle in the local currency.

BI said pressure from the rupiah’s depreciation affects the inflation rate more than the buffers firms may make when exchanging dollar to rupiah.

Under the new regulation, hotels and restaurants will be allowed to post quotations in dollars for online promotions to attract tourists but everything must be paid for in rupiah.

Reuters

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Jakarta. Indonesia is preparing to move a Filipina death row inmate for execution after she lost her appeal in the Supreme Court earlier this week, the attorney general’s spokesman said on Friday.

The planned executions of Mary Jane Fiesta Veloso and nine other mostly foreign drug traffickers has drawn international criticism after repeated pleas for mercy from the United Nations and various governments have gone unheeded by President Joko Widodo.

Veloso will be moved from the city of Yogyakarta to the maximum security prison on Nusakambangan Island in Central Java, where the rest of the group awaits execution by firing squad.

“We can say that [Veloso's] case is done,” the attorney general’s spokesman Tony Spontana told reporters.

“There will be preparations to move her soon because the plan to execute all [10 convicts] at once hasn’t changed.”

The attorney general’s office has yet to announce a date for the executions.

Four other foreign nationals in the group have also lodged last-minute appeals against their death sentences, forcing the attorney general to hold off on the executions until all legal processes are seen through.

Two Australian prisoners are among those appealing their sentences. The Australian government has been pursuing an eleventh-hour campaign to save their lives, but Widodo has refused to budge, ramping up diplomatic tensions between the neighbours.

Indonesia has harsh penalties for drug trafficking and resumed executions in 2013 after a five-year gap.

Reuters

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